Socio Economic Ramblings

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The Indian Growth Engine: A Hobson’s Choice

Published June 14, 2013 by vishalvkale

The recent news on the economic front has brought little cheer with IIP numbers, Current Account Deficit, Inflation, Exchange Rates all being dissatisfactory. Market sentiment continues to be abysmal, and charges of misgovernment abound. There seems to be little cheer on the global horizon either with Europe in the doldrums, BR(I)CS being questioned, and the grand-daddy of them all (USA) having serious problems of its own. This, in a nutshell, is the scenario that confront our policy makers,  planners, corporates and the common man

The reaction from at least the policy makers is clear, as is evident from the Hon. FM’s statements of recent days: FDI! Attract foreign inflows! The reaction of corporates is also crystal clear, at least externally – wait’n’watch. And the common man is way too occupied in meeting his own targets of meals for the family 2 times a day to worry overmuch about anything. And, at the end of it all, no one is actually doing anything, in reality hoping that this is a cyclical downturn, and the wheel of time will bring the economy churning back to full speed in the due fullness of time. 

Well, I hope they are right and I am wrong; that would be great, for it means minimal damage. But my analysis tells me otherwise. First, there are serious structural issues in the Indian Economy that are the major hindering factors. These problems – unconscionably high Fertilizer and Oil Subsidy bills, policy uncertainty, investment slowdown and flight of capital, fiscal deficit, infrastructure issues, project delays at both clearance and implementation stages etc – are not ones that will correct without affirmative action. Therein lies the rub; and all this is being played against a backdrop of corruption.

The action that is being taken currently is far from affirmative – we have been hearing talk of breakthrough reforms for time immemorial with little or no actual substance in them. Yes, the fuel price correction was a step in the right direction; but the vehicle of reforms got stuck in a traffic jam after that step. There is nothing concrete in evidence, or in the pipeline (going by news reports I have read) that indicates a genuine series of steps that tackle the structural issues relating to the economy listed above. Let alone political hot-potatoes like Fertilizer Subsidy – which is admittedly easier to talk about than actually reduce; even some of the simpler, easier structural issues lie unattended. The biggest pity is that we have in power tried and tested politicians whose skill at running an economy  is well-known by all; furthermore, given all that has transpired these past 2 years, they have nothing to lose – and consequently everything to gain – by taking hard decisions. And yet, we have a stasis in the overall politico-economic scenario. 

The issues I am referring to are policy uncertainty; flight of local capital; project approval delays; project implementation problems and corruption – all leading to investment slowdown. For investment to improve, sentiment (expectations of growth, ROI etc) will have to be positive; for it to be positive – we have to give a certainty to investors in terms of climate, and lack of hurdles. In short sentiment will have to improve if we are to get back to those halcyon days of 8% – 10% growth. And for growth, you require capital. First off, any economy that is dependent on foreign capital is not exactly a dream economy; we should be asking ourselves what can we do to  ensure local capital stays inside, and is used to generate local strengths and growth. As regards foreign capital – why should it come to India in these times, with the attendant political risk it entails – of which we have seen plenty of evidence in the past year alone? Furthermore, the lack of clarity  in policy matters – think of FDI in retail – is a further dampener. 

We can thus look at this in 2 parts – foreign and domestic capital; or to simplify matters – we can look at steps to be taken to ensure investment climate improves – which brings us right back to the issues highlighted above. For the nature of capital is such that each  – foreign or domestic – will flow to the area of least resistance and optimal returns. And for that to happen, we will have to ensure policy clarity, remove implementation hurdles and reduce red tape. 

Much has been written about policy clarity in the financial press; almost too much. But on implementation, there is little that is written that deals with the core of the issue. And that is the true sad story that is sweeping across India – Cobrapost exposed the underbelly of the Indian Banking sector, embroiling Axis, ICICI, HDFC and IndusInd banks (among others) in the resulting furore; the recent drug scandals that have rocked Ranbaxy, a slight google search will reveal other drug companies facing some objection or the other, with Wochardt, Dabur India, Hospira (to name but a few) receiving alerts or being placed on watch. Telecom is yet another case in point, which needs no details – having been covered threadbare in the news. Mining has also been exposed as a hotbed of corruption and crime. Connect the dots – and the picture that is forming is not a happy or indeed a comfortable one. All these – and more – and going to ensure that there is a negative pull on the India brand image and global sentiment. Combine this scenario with the policy stasis that is in evidence- and you are looking at trouble with a capital T. 

Now take all of this, and add to this pot-pourri the top-heavy nature of India’s development with the poorer sections of society having been bypassed in the growth from the 1980s onwards – The per capita income of the bottom 20% of India’s population has not changed (as a percentage share) since 1978. That means, the bottom 20% of our population has not benefited at all from our economic boom. This is also confirmed by consumption patterns: with the consumption by the bottom 20% of the population being static @ between 0 – 1 growth%, in complete variance with the 3% growth registered by the top layers. Not only are the interventions targeted at the poor not reaching them; there is also an absence of opportunities for them to grow out of their hopeless situation in terms of healthcare, education and other HDI parameters, where we are among the poorest in the world. Unless this latent potential is tapped, real growth is well-nigh impossible; but that is another story, which I shall connect up in the second part of this article.

One could almost be forgiven for assuming that we are looking at India in a state of implosion – were it not for the activities of the pillars of modern India as identified by Shashi Tharoor in his landmark work “The Great Indian Novel”. I refer to the Media and The Judiciary specifically, whose activism has brought all of the above cases to the public eye. 

This is the backdrop in its entirety; in this scenario, it can be readily seen that there is really no choice in front of the powers that be; in other words, a  Hobson’s choice. Steps to tackle all of these problems have to be taken; uncertainty, policy matters, corruption etc everything has to be dealt with. Working on any one parameter alone will not suffice – since the threat of exposure will remain; the hindrances to implementation will remain; the problem of bribery and corruption will remain. This is bound to act as a dampener – as corruption makes implementation of projects cumbersome. The increasing activism of US Government on their companies’ bribe-giving world-wide is a case in point. To improve sentiment the requirement is making business easy in India, which will not happen unless corruption is tackled on a war footing. Not anymore; not after sector after sector of the economy is embroiled in controversy. That will only further capital flight – which already seems to have begun, if you take into consideration investments by Indian groups abroad. 

For, if the hope is that we can kindle real growth by tinkering around with some issues without addressing the real problems in their entirety, then this is a stillborn hope. Without addressing both sides of the equation – namely, policy stasis and implementation – we will not be able to take Brand India to where it was 5-7 years ago. The reason is evident- for in those halcyon days of hectic growth, we did not have the additional baggage of crippling scandals rocking just about every sector of the economy. Those were the days of a virgin territory, if you will; this is a luxury we dont have anymore. And neither can we realistically expect to shove these exposures under the carpet and hope that things will continue as before – our active pillars of Media and Judiciary will ensure that a percentage – hopefully a large percentage – of unsavory deals will get ruthlessly exposed. Furthermore, we cannot expect the global anti-corruption flair (esp US Govt) to wane. That is why this is a Hobson’s Choice – we have to look at both stasis as well as implementation hurdles…

In the next part, I will take a deeper look at the implementation aspects; and why it is fallacious to blame our political class for everything… and why passing the Lokpal bill alone will not be the panacea it promises to be; and why the left-behind people need to be looked at. Lokpal is vital; but it is just one in a series of steps… 

FDI Revisited: latest research

Published December 28, 2012 by vishalvkale

Date: 25th December

It gladdens the heart to see optimism and good sense beginning to prevail over this non-issue; the latest article on this matter has yet again revisited, and added to, earlier papers on this topic, which is worth a mention.

Research on impact of retail sector regulations by the author for a CUTS international report on Competition and Regulation in India, 2011 revealed that:

(a) Globally, in densely populated countries like India (with consequent higher real estate prices), small-store formats thrive, and even flourish in the face of the competition from big-box retail;

(b) On the other hand, the introduction of foreign competition forced manufacturers to cut costs in their supply chains and small stores become more efficient, and provide more serious competition to large-store formats and centralised operation that the multinational retailers prefer;

(c) This latter trend is already becoming apparent in India, in many localities in Delhi that the study surveyed, as small store-owners are responding by upgrading to modern formats with convenient and better organised displays, ICT (information and communications technology)-enabled storage and procurement management and electronic billing counters, while building on their own areas of strength.

This is precisely what my arguments have largely been about, as presented in this blog; as well as of the entire pro-FDI community in retail; none of the above is rocket science; having said that it is important for decision-making to have a confirmed research report that corroborates intuitive analysis; analysts have been known to be wrong before! Most research was a bit dated, so it is nice to have a reconfirmation.

But the article goes beyond that; and I quote: “Though 53 cities in the country meet the population criterion, only 18 of those are in the 10 states and union territories that have agreed to permit FDI in multi-brand retail. Thus, the policy is de facto akin to a “lab experiment”. With  that, in combination with the research quoted above, comes to a close a needless argument – or, at least, it should. There will of course be political overtones and social reactions, as it is an extremely emotive topic – but that is another story.

While the article correctly touches on the rising star of online retail, it makes a link between online retail and kirana store sales. Yes, the younger generation is very adept at and comfortable with online transactions, but saying that it will impact kirana store sales seems a bit of a tall tale. I may be wrong in this; for it is too early in the day to make any comment. And this is also corroborated by the research, which comes across as a surprise. Does online retail really constitute a “more credible threat” to kirana sales?

That it is a threat in some categories – like books – is already a reality; that much is true. But does this extend to grocery? Honestly, I am inclined at this point on the reverse; that it does not – not over the short to medium term. The reason is the fast growing population, 6% internet penetration (let alone transactions penetration), low awareness & education levels, low per capita income, buying behaviour with the lady of the house preferring the physical touch and feel and sporadic, unplanned & at times impulse purchases of other categories from Kirana offtake. Perhaps, when India is a developed or middle income economy, the game may undergo a change… let us see. True, online sales are rising; but the sheer numbers of consumers in India might just ensure a safe short-to-mid term. Further, the urban and A-class consumers might shift over to retail – the threat of shift as calculated in the report can only mean that; this may happen over the mid term even. Since I accept one part of the report, I have to accept it all.

And if you look at it in this way, then it begins to click and come together, As internet penetration, awareness, usage and comfort grows in tandem with increasing income levels, the penetration of online shopping in combination with Cash On Delivery will increase. Thus richer localities will see changes; the others will only feel the same over a longer-  indeed, given the realities in India, a much longer period. What precisely will those changes be, which categories will bear the heaviest brunt, what changes occur at the store level, how our shopping experiences will be redefined all lie in the future… let us see how it turns out!

India Unfettered, but….

Published September 22, 2012 by vishalvkale

The mornings usually have a specific ritual for all of us… a cuppa tea or coffee with the newpaper (online or print, what does it matter) to peruse… and it was during this daily ritual that I noticed an article in the Business Standard Weekend section: The Knight In Veshti. (Link Enclosed). A remarkable article that showcases just how the critical and laudable decisions were taken leading upto the opening of FDI in Retail as well as the Diesel Price Increase. A blow by blow account such as this one is not easy to come by, so savour it, and read through it thoroughly.
I say read through properly because it raises many deeper questions (not about UPA-2; this is not a political blog) but about what passes for democracy in India. In some cases, deeper and disturbing questions; since there is no clear answer in the foreseeable future in sight. I quote:
Dinesh Trivedi, then railways minister, said he could not be party to the move as his leader, Banerjee, was opposed to it. “;
” Mukherjee subsequently told the Lok Sabha that further consultations with stakeholders would follow to create a consensus.“.
Last week, in one day, the cabinet decided to open not just multi-brand retail to foreign investment but also civil aviation, power and the media. What has changed between then and now, since the stakeholders are the same and the naysayers, too, are exactly the same? The answer is that Palaniappan Chidambaram has replaced Mukherjee as the finance minister“.
” The General Anti Avoidance Rule was expected — but not in the way it was framed, with the taxman having virtually unfettered powers. At a pre-budget meeting with Mukherjee, Prime Minister Manmohan Singh had virtually pleaded with him to drop these measures. An officer recalls that ahead of one such meeting — as they were preparing the budget speech — they were asked to suspend proceedings until Mukherjee had met Singh. Mukherjee returned to North Block after the meeting with the terse message: go ahead. Singh had tried to intercede and dilute the measures but failed.“.
This reporter had asked a bureaucrat when he came to know that FDI in retail and other measures were going through. The answer was prompt and unhesitating: “On June 24, 2012.” That was the day Mukherjee had announced he would resign as finance minister (he did so on June 26) “to embark on a new journey”: to the Rashtrapati Bhavan
Please note that there are 2 political parties highlighted in these exchanges; this is not limited to the congress. That is why I say that this is not a political comment, but a baser question relating to our democracy.
Further, please also note how in each case the individual supercedes not only the organisation but also the decision making process and the incumbent chair. What kind of a democracy is this that does not have any genuine democratic process at its core? This is the way it has always been since before independence: you need only to study history in detail to arrive at this inescapable conclusion.
How has it transpired that a finance minister is more important than the prime minister? How is it that the wishes of one leader – outside the government – checkmates all policy-making? This is not about right or wrong; it is possible that the leader was right in doing so. The point is the absence of genuine democracy in the parties; where one man’s will prevails to such an extent that it paralyses decision-making. A situation where decisions are made by one central leader; a situation where you can walk out and create your own party if you dont agree; A situation where there is no clear public face of a party and anyone can speak his opinions… Are all parties the same? I will definitely try to decipher this parameter before casting my vote the next time. If I can find a party with a genuine democratic system… a big IF!
If you observe around you, this is clearly seen as a basic behaviour in India, where the wishes of one person prevail to an inordinate degree. It is considered bad to ask questions or challenge the leader. To be sure, it has some grounding in our culture which does not encourage questioning elders. Further, in a diverse country such as ours, perhaps this is the best way as it ensures that no one set of people enjoys total will over others – a way to balance as it were. But at some point we Indians need to ask ourselves if being silent is always good? Why cant we evolve ourselves such that we consider it ok to ask questions, and not taken to be a rabble-rouser? 
Democracy is a form of government in which all eligible citizens have an equal say in the decisions that affect their lives. Democracy allows people to participate equally—either directly or through elected representatives—in the proposal, development, and creation of laws. It encompasses social, economic and cultural conditions that enable the free and equal practice of political self-determination….
Can anyone tell me where the “equal say” is here? What democracy are we talking about? Does democracy mean that it extends only to the election of people, and not to the electoral parties? Ok, fine… nothing has been done about corruption. But what about basics? It is high time that you and I – the normal citizen – turned out to vote; and make our vote count for change. Our voting percentages are abysmal! Problem is, I cannot see anyone who deserves my vote… there is but one ray of hope – Arvind Kejriwal. But even that is slowly diminishing. I hope I am wrong, because we need change.
Perhaps the time has come to vote as per Section 49-O: Since the ballot paper / Electronic voting machine (EVM) contains only the list of candidates, a voter cannot record his vote under Section 49-O directly. He must inform the presiding officer at the election booth. This violates the secrecy of the ballot. However, with paper ballot a different method is used to “waste” one’s vote, which is stamping on multiple candidates. In fact this was the standard method of giving null votes without violating secrecy before the advent of the EVM. At present, in an election, a winner will be declared irrespective of the number of ‘non-votes’. However, a note of every ‘non-vote’ will be made with the Election Officer, and the total number of non-voters will, presumably, be available under the Right to Information Act.
But that would still leave our basic habits in place… to which not only do I not have an idea what to do; I do not even have an idea as to why we do it! Why

70% think cheating is ok…. HT survey

Published July 29, 2012 by vishalvkale

Catch them young – Hindustan Times:
‘via Blog this’

Consider this: when asked if dishonesty was acceptable for success, 70% said yes. The response to whether it is fine to cheat one friend for another was split almost midway — 43% said ‘yes’ or ‘sometimes’, while 43% said ‘no’. The rest were unsure
The results of this survey are by themselves quite shocking; but far more than being just shocking, they are also a  call-to-arms (as it were) for all of us, a wake up call if you will. What is even more worrisome is that this is not the first wake-up call that we are receiving… we have studiously ignored each and every indication and wake-up call that we have received so far.
What kind of society are we building – one in which the large majority of citizens think it is ok to be dishonest? It is acceptable to cheat? Far more pertinent is the question as to the source of their “learnings”, if you could call it that. Schools certainly don’t teach students to cheat or be dishonest. There are 2 sources: one which nearly everyone will be able to point you accurately. This is the external environment: the interactions of students with their environment exposes them to visible signs of people mortgaging their morals for a better standard of living, for enabling routine tasks, for simplifying and removing obstacles on a daily basis. This will certainly have a discernible impact on the more impressionable among them, and affect their behaviour. Their initial experiments with dishonesty bring results; thus it is that the new behaviour translates into a habit… and from there, it transmutes into the value system and core behaviour patterns of the individual.
But the second one is by far the more dangerous… in their formative years, they are largely exposed only to family; and here they see their parents indulging in dishonest behaviour.. like paying a bribe – or accepting it. This is bound to leave an impression on the young child; it teaches him that dishonesty is ok. Then we complicate matters and further compound them with advise and dialogues like “if he is bullying you , why dont you fight back? Dont come home crying like a cry-baby”; or “arre he is a child: masti kar rahe hain. Aur tum toh bade ho:he is cheating because he wants to bat. Let him!” Each and everyone of these interactions drive home one solid point: it is ok to cheat, it is right to be dishonest. Each and every such instance- howsoever small – teaches the child how to behave… whenever the child observes you paying a bribe, for instance – it drives home a point: My Dad thinks it is ok.. so it cant be bad.
It is a combination of the above 2 factors: I cannot say which is more important; but that question seems to me to be immaterial. What is important is the original question I have asked:
What kind of society are we creating? What kind of example are we setting our kids?
Do we care??????

Satyamev Jayate!

Published July 11, 2012 by vishalvkale

It is with a considerable degree of surprise that I have been reading some articles criticizing the iconic show Satyamev Jayate and Aamir Khan, which are frankly way beyond my comprehension. There are views being expressed that the show is pure showmanship, commercialisation of problems, will Aamir return to these problems once show is over, the show is just Aamir, Aamir and Aamir… do they (the critics) do justice by their comments? Let us examine it in 2 parts: Aamir Khan, and Social Change
Aamir Khan
No television show has created as much of a buzz as Satyamev Jayate, the iconic show anchored by Aamir Khan. To a nation used to a diet of game shows, movies, soap operas, reality shows it was unthinkable that a television show based on something as serious as Satyamev Jayate could be a resounding success – but that is precisely what has happened. It is far beyond both my knowledge as well as the scope of my blog to analyse the precise reasons for its stupendous success, so I shall leave it at that. My concern is more towards the reactions – specifically negative reactions – it has generated, and its supposed role in our society.
First of all, let us get one thing straight: The anchor has placed himself quite literally on the firing line by highlighting various unhealthy habits of society. He ran a very real risk of doing serious permanent damage to his brand equity (The Aamir Khan Brand) – which would have meant an erosion of his earning potential. What the show was attempting was actually very risky. We have the benefit of hindsight: we know how it turned out. He, when he took the decision to do it, did not. That took courage – far more courage than anyone from his industry has ever shown. That is beyond dispute. We have to look at things from that perspective.
Secondly, Aamir Khan was getting into uncharted territory; in his line of business, his stock-in-trade is a combination of his face-value and the combined impressions of his performances & associations that is formed in the audience mind. His paycheque is derived from what the people think of him. Therefore, the attendant risk of attempting Satyamev Jayate was of a very high grade for him. Further, you also have to take into account one additional point: Aamir Khan’s movie career is far from over. That apart, he is spending a good deal of his time on this project. He does not need to do television yet: he could be doing production or acting; but he chose TV. If for that he has to be well compensated, I do not find anything objectionable in that. Especially since the end-product is an awesome production with the capacity to jar you to the deepest part of your soul.
Third, as we have seen over the past few weeks, he even had to take personal risk: with several affected power-groups, professionals etc threatening to take him to court. He knew what the content of the show was; he was also mature enough to understand the repercussions of the content. Despite that, he went ahead. His commitment has been held up to scrutiny in the face of allegations and threats – and he has not backed down.
Fourth, let us all not forget that he is also a member of the production team!
Social Change
Fifth, the show is creating a buzz, and it is also leading to a spotlight on some issues that have been on the backburner. It has to be understood that these issues being taken are deep-rooted habits, and are embedded deeply in our society. The agenda undertaken is social change: and one man cannot change a society. It requires concerted effort by a variety of change agents, one of whom just happens to be Aamir Khan. He is a change agent – only thing is, he is just one of the catalysts to change. Instead of panning the show, we should welcome it! How does one change a society? Is everyone so naive as to believe that it will happen automatically? Or that change will happen overnight?
Sixth, just how are societal and cultural norms formed? They are formed by countless social interchanges within members of a particular culture or sub-culture over a long period of time – time that may extend to hundreds of years. Honor Killing, Female Foeticide, Dowry etc all have their roots in the overly patriarchal structure of our society. These social attitudes were not built overnight: they have their roots deep, deep in the past. Other problems also were developed over a period of the past 50 – 100 years, and have now become endemic. How are these to be removed? Someone has to make a start. I certainly do not have an issue with a celebrity lending his name to these issues: it serves the dual purpose of highlighting them as well as acts as a multiplier.
And the clincher: this concept could have been thought of earlier: these points could have been highlighted forcefully earlier. No one took the trouble of doing so, and now people are panning the one team (Team Satyamev Jayate) that is doing a fantastic job! At least they are doing something – which makes them far, far better people; far far better professionals than those of us who choose to sit in the comfort of our environs and pass comments.
I am not stating that all of us are armchair commentators: for all I know a good many may be equally  – or more active: as indeed countless social workers are. My point is that let us support efforts like Satyamev Jayate rather than pan them; by panning them we run the very real risk that henceforth no one will attempt any such effort…which will be catastrophic for us as a society. If that happens, the current focus, and the multiplier effect and the attendant positives, will forever have been lost. Such efforts act as force multipliers: it is upto us to encash them!

Crisis times bring an opportunity… esp for the government!

Published May 26, 2012 by vishalvkale

  • Current Account Deficit nearly 4%… (or more than 4 now)
  • High Fiscal Deficit
  • High Inflation
  • Policy Paralysis…
  • Eurozone brouhaha
I could go on and on several real and imagined parameters…  but the above should be good enough to underline that we are currently passing through rather tough times. The newspapers are, on a daily basis, full of doomsday predictions, blaming ruling alliance and so on and so forth! Policy paralysis has almost become the buzzword! And it is precisely these thoughts running through my mind – especially the tough times bit – that reminded me of an age-old idiom “Every black cloud has a silver lining“. 
I dont want – or intend – to sermonize; so let me get straight to the point: there is a clearly definable silver line that has now appeared for the ruling party. From the UPA-II point of view, the important points are:
  • Indian Economy in trouble
  • Public up in arms against just about every move the government makes
  • All time low confidence levels in government
  • World Economy teetering
  • Political equations in a fluid state
  • Mulayam Factor
  • BJP in disarray as well
It is an environment that is fraught with challenges, dangers for anyone in the seat. And that means, it will take a very brave person indeed to take the risk of sitting on the seat in such times – and run the inadvertant risk of  sharing the blame… 
The second point is the fluidity in the overall political scenario and the Mulayam factor, which gives a bit of breathing space for the UPA government. The 3rd factor is the problems in the opposition. Put all these together, and the result is a very high degree of certainty that UPA-II might just last the full term. And that brings me to the silver lining!
The silver lining in quite simply the freedom it can afford the powers that be to take some badly needed structural corrections in the systems – as no one is in a situation to take advantage of it. Secondly, even if the opposition sort their house, the chances are very high indeed that they will let UPA-II handle this mess, and wait for 2014! That being the case, the reforms – if they are pushed through – can just turn things around. They have just taken one courageous decision in petrol – they can do more, if only they show the will and the attitude. They have been placed in a unique position – one which affords them the leeway to take tough calls. Yes, it is a 2-edged sword, no doubt, the risk is there that some partner might jerk the rug – but the opportunity is there. and the chances are the allies will scream and shout, but actually do nothing. I agree that Petrol is perhaps the simplest of the decisions to take, as vested interests are not stoked  – or identified party positions are not challenged; vote banks are not threatened too much. So everyone makes a hue and cry, but does nothing! 
The other steps might not be so simple… but the UPA-II is now undeniably in a position to take some calls… now if only it does do precisely that!

Facebook Musings

Published April 5, 2012 by vishalvkale

Circa 1998… I am in my first job – and get a call from the Director-Marketing’s cabin. I reach the cabin with all sorts of good, bad and ridiculous thoughts racing in my mind… Mr Khardekar says – “Come in, Vishal. Meet your brother!!!!” Great. Except for one tiny detail.
I had never even seen the guy in my life – this brother of mine! (Sorry, Atul Dada)
We got to know each other that day, then met quite a few times till we drifted apart again in due course of time. What has this got to do with Facebook? Plenty – Have patience! Well, time passed – and then, one fine day, I receive a friend request from Atul Kale on facebook. He had since shifted to England, and we rarely – in fact, never spoke to each other. But then, thanks to technology and facebook, we got in touch again. Score one for facebook!

I myself am a late convert to this platform… rejected many, many requests – till one day, in an idle moment, I decided to see what it is all about. And, that has proven to be one of the better decisions I made. People from all periods of my life came back into my life – classmates from 1984/5 onwards; my closest friends from college – just by the simple expedient of a received request in my inbox – or a simple friend search. And, if that friend has his phone number updated… all the better. The branch commercial manager of my second job; the ex-colleagues; the extended family in the form of Shirish and Milind Dada who I met through Atul Dada…. I could go on and on. Not that I hadn’t tried hunting on other websites before – but never with any  great success. Facebook is in a class of its own.
And there is more to it… I found, to my great delight that, by the simple procedure of clicking like on my favourite websites – Hindustan Times, Times Of India, Business World, Business Today, The Economic Times, The Business Standard etc – I could stay updated with news from around the world on my wall. Product Updates from Cakes India, Peter England, Allen Solly etc added spice to it. It all depends upon the consumer – you can configure your wall the way you like it. Share important articles -it gets recorded on your wall – return to read or refer at your leisure! The uses are myriad in number – and perhaps that is what makes it so ubiquitous.
And that, my dear friends, is why I have classified these personal ramblings of mine into Business category. Note the word ubiquitous… the business possibilities are innumerable. From reaching consumers with product updates  – Peter England – to staying in touch with consumer sentiment – Perfetti Van Melle, whose wall was updated with comments on consumers who found their soldier ad offencive – the business uses offered by this platform span a veritable cornucopia of avenues. Like CakesIndia, with their mouthwatering cake snapshots, and ordering possibilities, for one example. Each month (maybe more) I find one or two innovative measures…
These opportunities are based in one simple fact: this is a medium through which you can target almost the entire online population of the nation. Two, most of the regular facebook users are young- 15 – 25. Three, 25-45 age group is also getting into the act (Fact- I just checked the number of my family members who have gotten onto facebook over the past 12 months). Three, the addictive nature of the medium means a large number of users regularly check in. This can be readily seen from the number of old connections who got in touch with me, and vice-versa. Four, you are directly addressing an educated person. Five, it offers a chance to interact with consumers directly. Six, the users span the entire spectrum of product target markets. Point is, it is a ubiquitous medium composed of an educated, and by and large earning people – or related to earning members. At least at this point in time…. 
The icing on the cake? Yup. You got it!

Defence acquisition mess; Media and Citizen attitudes

Published March 29, 2012 by vishalvkale

The Hindu : News / National : Inside India’s defence acquisition mess:

‘via Blog this’

Continuing from my previous post, a simple perusal of the morning papers revealed an expected but nevertheless interesting scenario: Most news coverage was concentrated either on The General or on the Congress / UPA. Here we are- faced with a nearly 1962-like situation in terms of Defences, sitting on a powder-keg situation, nearly naked (if the Chief’s letter is 100% accurate – which I dont doubt, judging from a series of critical articles in various sources over the past few years) – and the entire Media is focussing on anything but Defence. Most newspapers are sticking to their market positioning – which is fine under normal circumstances. If you are known for reportage, your readership will be of that kind. Similarly, if you have a market position of in-depth focus, then that will be reflected in your product. Being a sales & marketing professional I both understand and accept these realities. But this situation is anything but normal – it is exceptional, anyway you look at it! Rather than build pressure on the government to take immediate remedial measures to correct the scenario (as well as restore the morale of the Armed Forces) the Media is just doing routine reportage.
None of us can say that this development has come as a complete surprise: there have been any number of articles in magazines highlighting the increased level of problems in the Army. Admittedly, none were as serious in tone: but the fact remains that murmurs of something of this kind were rife in some magazines which questioned delay in fighter aircraft procurement, tank procurement etc. What makes this different is that this is coming from the head of the Army – which is an infinitely more serious development, as it impacts the morale of the forces, saps their energy and exposes its underbelly. More is expected from the Media at this juncture: and I hope that this particular development is not consigned to the back pages with time. A concentrated pressure is needed to ensure follow-up action! We need to gavanise the bureaucracy and the government to respond to this serious threat to national security – and if our Armed Forces are indeed so underprepared, then this is a threat to security. As it is we are facing serious threats from terrorism – and an Army unable to respond is the last thing we need at this point. 
Some good can still be had from this – if we can get the bureaucrats and the government to act on the weaknesses highlighted rather than do a witch hunt. Judging from the happenings in Parliament, this does not seem to be happening- with various speakers waking eloquent on the state of our Armed Forces as being ship-shape. Who are you trying to fool? By covering up, you are only fooling the people, some of whom will believe in your mumbo-jumbo. The more knowledgable (including enemies) probably already have an excellent idea of the state of the Indian Army. What is more, the fall in morale can only be good news to enemies. Rather than mere statements, the need of the hour is a white paper than either gives specific rebuttals – or gives a plan to plug same.
This is not a problem that can be wished away – it needs a clear strategy to be managed. And it is the absence of a strategy that is bothering me. No witch hunts now, please- at least, not in public.   Present a common front. For one thing is clear: given a choice, I would rather believe the General than the Government. The credibility of the government is lesser as compared to the General, simple as that. And that is what the government also needs to address. As for the rest, please rise above party lines and affiliations… that is the need of the hour!

It’s The Army Now….

Published March 28, 2012 by vishalvkale

Army toothless: General VK Singh drops letter bomb on govt – Hindustan Times:

‘via Blog this’

I am beginning to wonder what is required for the people of India to wake up from their abhorrent stupor… Institution after institution is collapsing with monotonous regularity due to abject neglect! School performance is the lowest in the world; rampant corruption; inefficient policing; falling economic indicators; Telecom tangle; FDI in retail imbroglio; Judicial activism; Satyam….
And now the Army.
One point shines through this entire episode: The Media is more concerned with the Government’s continuance / Fate of the Army Chief / How the letter leaked / political reactions / Army’s politicization. What about the security of the nation? Rather than criticize the Army Chief, why has no one from the Media (judging from the coverage so far seen on various websites) critically examined the issues highlighted in the letter? What is more important: The Government, The Political Parties, The Letter – or The Nation? That should be a no-brainer: the nation should supercede all other considerations. And yet, I have not seen any reaction in print on any website so far. Let me see what the morrow brings – I am keenly waiting for tomorrow’s newspapers to see if there is critical analysis of the contents and their truth; as also how much pressure there is on the IAS lobby and the government to come clean on this matter.
I, for one, want to know the extent of the truth in the letter: has our Army indeed been rendered powerless for want of Modern Equipment and Ammunition? I very much fear this might be true- judging from the delay in finalising the Fighter Aircraft deal. The time has come for all of us to demand from the powers that be in New Delhi – Bureaucrats and Politicians alike – that they come clean on the state of affairs in the Army. Further, this matter should be dealt with without accord to politics- for we have now been rendered powerless as the respect of the Indian Army will have taken a severe beating across the world. This is also going to have a serious effect on the “India Shining” image. There was only last bastion that was left untouched at the altar of power games and corruption – The Armed Forces.
We have been hearing rumblings of dissatisfaction in the Armed Forces over the process of procurement of arms, over the control of the bureaucrats, the increasing politicization of the process. We have also read quite a few snippets of news highlighting the urgent needs of the Armed Forces… but nothing quite as serious as this. And in my opinion – the blame lies at our own doors – our carelessness, our I-Me-Myself-First attitude, our how-does-it-effect-me syndrome.  Corruption, Bad Governance is eating away steadily at all of our achievements – and this is being compounded by our total lack of concern on this issue. For this is what this is: Corruption & Bad Governance!

Retail: Survival Strategies of the Kirana Retailer

Published March 16, 2012 by vishalvkale

ICRIER Report on Organised Retail:
I have been arguing in my writings that the threat to kirana stores in India does not exist, and that the 2 can co-exist…. interested parties may refer the above researches that have been conducted in India circa 2008 & 2010. I admit that these are a bit dated, and might need to be re-validated. However, I have not observed any difference in any of the cities in which I have made queries and observations; the trend seems to be the same as before. Not one of the small retailers I have spoken to in any city has told me of a decline in business volume or profit.

The key finding of the report are encapsulated below:
1) An initial fall of 23% in terms of volume. This loss is made up in the subsequent years
2) No evidence of a decline in overall employment in the organised sector
3) Closure rate of the small kirana store @ 1.7% due to the Organised Retail Phenomenon. Total Kirana closed were @ 4.2%. Out of this 4.2%, only 1.7% were due to organised sector factors
4) Competitive response from traditional retailers through adoption of technology and improved business practices
5) Extension of credit to customers

Far more interesting is the anaylsis of the impact of / on customers
1) Increased Consumer Spending
2) Proximity is a major advantage of the small retailer

Increased Consumer Spending
This is something all of us should have observed! We do tend to pick up far more items when the full range is displayed in front of our eyes: that 10-rs pack of chocos; those cakes and tit-bits; small tinkers that we spot on shelves; the odd item with a deal too good to refuse; the latest kitchen gizmo; that shiney kitchen aid; that bunch of hankies we dont need; all those lovely toys for the kids… the list can be endless.

An Organised Outlet will be at least a km away – if not more. The very fact that the local kirana store is right next door is in itself a powerful advantage. This is particularly important since needs arise in a normal household practically everyday. Further, quite a few items are usually forgotten in our trips to the mall – or the brands we need are not available.

Both the above do not explain why is it that kirana concept is not only surviving, but also thriving. The adjustments made by this category can be said to be:

1) Convenient Timings
2) Credit Facility
3) Lower wait time in-store
4) Personalised Service
5) Smaller Pack Size Availability
6) Consumer Goodwill
7) Home Delivery
8) Facility of open goods: loose sale of packaged goods
9) Local Brands Stocking
10) Knowledge of Consumer Preferences
11) One-stop shop concept, with a wider range of products being stocked – viz. stationery, batteries, bakery items, snacks and sweet meets, ice cream, soft drinks,
12) Friendly replacement and return policies
13) Innovative new products especially in impulse categories
14) Perishables like milk – esp home delivery on coupons
15) Bill payment support to nearby households and other services
16) Stocking of all new product launches – faster than even the chains

The above small items, taken together, are creating a powerful force that is retaining the customer profile. On the customer front, what is happening is that the share-of-wallet, which was earlier 100% to the local kirana market, is now being shared between the organised retailer and the kirana merchant in a few segments of the market. For the lower segments of the population, the facility of smaller pack sizes, loose goods and credit are together ensuring stickiness. In fact, these last 3 factors are powerful strategies, given India’s demographic and income profile.  As an example, I have frequently found that a 100g pack of my brook bond herbal variant of Red Label is not stocked by malls. I can think of quite a few other similar cases…

The other major factors in the equation are
1) Increased Consumer Spending
2) Increased Prices
3) Increasing Households and Population
4) Increase in Per Capita Income
These factors are growing the overall market: which is creating space for all the players!